Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Tuesday, December 18, 2007

IntoPittsburgh: Chicago II

Today, I respond to Where's contention that Chicago is more dependent on Pittsburgh than the other way around. The crux of the argument is as follows:

Without Pittsburgh, in the literal sense, Chicago would not crumble and blow away; to think so would be naive. But Pittsburgh is a part of a group of cities that, together, have allowed Chicago to experience its recent -- and rather stunning -- revival over the past two decades. As post-industrial Western megacities like Chicago, New York, or London began to try to pick themselves up after losing manufacturing jobs in the 1970s and 80s, they began to rely on what you could call innovation-intensive fields like biomedicine, design, information technology, and (of course) the arts. These are highly specialized fields, and ones that many traditional middle class workers were not trained or educated to particpate in. Megacities, then, needed to draw in new talent from surrounding smaller cities.

Chicago needs the talent developed in Pittsburgh. I concede this point and would add that the demand for labor is why so many Pittsburghers have moved to Chicago. However, Chicago is also an impressive producer of human capital. If Chicago retained all of its local graduates, then would the city need Pittsburgh at all? Like Pittsburgh, Chicago's research universities are world class. Furthermore, Chicago attracts global human capital in ways Pittsburgh has not, at least over the last few decades. Chicago does not actively seek Pittsburgh talent, but Pittsburghers still move there as a result of established migration patterns (more chain migration).

Where does not consider Chicago's global impact, as compared to that of Pittsburgh's. The economic travails of shrinking cities such as Pittsburgh stands in stark contrast to Chicago's recent renaissance. Chicago is one of the exceptions to the Rust Belt rule. In fact, many are looking to Chicago to raise other Midwestern cities out of the doldrums:

Turn the Midwest lemon into lemonade by thinking big. If Chicago is stuck being the capital of the Midwest, it will have to lead the Midwest revival effort. Richard Florida, author of "The Rise of the Creative Class," says that what he calls "Chi-Pitts" — the swath of North America running from Pittsburgh through Chicago to Minneapolis — is the third-largest producer on the planet.

Chicago is on the right track by building its high-end service sectors, argues Brookings Institution's Bruce Katz. "Boston and New York were left for dead 30 years ago" but rebuilt their economies around one or two fast-growing sectors, he says.

The economic impact arrow points to Pittsburgh, not to Chicago. Connectivity with Chicago is crucial for Pittsburgh's future success. That hierarchy is unlikely to change in my lifetime. Chicago will remain one of Pittsburgh's main gateways to the rest of the world, short of concentrating on other global cities such as Toronto. When considering the urban dependency between these two cities, Pittsburgh is along for the ride.